US SPORTS BETTING
vectorfusionart/Adobe Stock
Rerouting the Wire Act: Can Statutory Interpretation Save the Wire Act from the Threat of Intermediate Routing Prosecutions?
Barry Boss & Kara Kapp of law firm Cozen O’Connor look at the legal ramifications of the PASPA repeal in the US, the move that finally opened the door to sports betting.
T 6 OCTOBER 2021 GIO
he sports-wagering landscape has evolved dramatically in the past 20 years. In 1992, Congress passed the Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. § 3702. The Act prohibited any state from authorizing any entity within its borders to sponsor, operate, or promote any gambling or wagering scheme involving betting on competitive sporting events. Fifteen years later, the constitutionality of the Act was challenged before the Supreme Court, and the Supreme Court struck down PASPA as a violation of the Tenth Amendment’s anti-commandeering principle. Since PASPA was struck down, states have rapidly moved to legalize sports wagering within their borders. Before PASPA was struck down, only one state, Nevada, permitted full-scale sports wagering activities. In the three years since PASPA was struck down, as of September 2021, more than half of all U.S. states have passed legislation to authorize sports wagering.
Enter the Wire Act, the federal law banning interstate sports-wagering activities over “wires,” including wired Internet connections. This law remains the most significant looming impediment to this burgeoning industry, in part because its terms leave significant ambiguity regarding how it extends to communications over the Internet. So what exactly does the Wire Act prohibit? On one reading, the Wire Act prohibits wired Internet communications placing bets or wagers across state lines. Given that many states since 2018 have passed laws authorizing sports-wagering within their borders over mobile devices, an important question for industry participants is whether the Wire Act prohibits communications that start and end in the same state, and only cross state lines temporarily along the way, known as intermediate routing.
In the mid-2000s, when anti-wagering sentiment was at its peak, regulators repeatedly took the position that the Wire Act’s prohibitions do extend to intermediate routings. More recently, in 2018, the U.S. Department of
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56
